Tensions are escalating between Gulf states and Israel, casting a shadow over the historic peace agreements reached three years ago. The United Arab Emirates (UAE) and Bahrain have expressed their frustration with Israel regarding the outcome of the 2020 Abraham Accords, which were negotiated under the US presidency of Donald Trump. These frustrations stem from the deteriorating relations between Israel and the Palestinians, exemplified by a deadly raid on a refugee camp in Jenin and controversial comments made by certain far-right Israeli cabinet members.
These strains are likely to complicate the US's efforts to deepen relations between Israel and other Middle Eastern nations, particularly Saudi Arabia. The White House has been encouraging Saudi Crown Prince Mohammed bin Salman to engage with Israel in pursuit of a peace agreement. However, bin Salman has refrained from doing so and instead restored diplomatic ties with Iran earlier this year, through a China-brokered arrangement.
The current situation was not part of the envisioned plan of the Abraham Accords, as Israel had hoped to create an anti-Iranian alliance. The region is now moving in a different direction, according to Aziz Alghashian, a Riyadh-based analyst who studies Saudi policy toward Israel. Saudi Arabia has publicly stated that the establishment of an independent Palestinian state is a prerequisite for recognizing Israel as an ally. Privately, Saudi Arabia has requested firm defense guarantees from the US, access to advanced US weaponry, and approval for its nuclear program, including domestic uranium enrichment.
Israeli Prime Minister Benjamin Netanyahu's religious coalition, which supports the expansion of Jewish settlements in the occupied West Bank, has faced criticism. Finance Minister Bezalel Smotrich, a member of this coalition, sparked controversy by stating that there is "no such thing as a Palestinian people." These actions have enhanced the backlash in Arab public opinion against the UAE and Bahrain, exacerbated by the recent offensive in the West Bank. The UAE condemned the operation, in which 12 Palestinians and an Israeli soldier died, as well as Smotrich's comments. The government of Bahrain has not yet responded to these developments. Morocco, another country that established ties with Israel around the same time as the UAE and Bahrain, recently postponed an Arab-Israeli meeting in protest against Israel's plans to expand settlements. However, Morocco later announced that Israel now supports its desire to control Western Sahara, which potentially eases tensions. In response, Netanyahu's office stated that he has been invited to visit Morocco.
The strained relations have also stalled some planned investments by Gulf companies in Israel. For example, a $2 billion acquisition of half of the Israeli natural-gas producer, NewMed Energy, by Abu Dhabi National Oil Co. and BP Plc, has been delayed due to regulatory approval. Similarly, a consortium of Abu Dhabi firms called off a plan to acquire a controlling stake in Israeli insurer and asset manager, Phoenix Holdings Ltd., due to restrictive investment rules.
Nevertheless, economic ties between Israel and the UAE continue to expand. Bilateral commercial flows, which were only a few tens of millions of dollars before 2020, reached $2.6 billion in 2022, positioning the UAE as Israel's 16th largest trading partner. This figure is expected to grow to $3 billion this year. Over a million Israelis have visited the UAE since the establishment of diplomatic relations, while the number of Jews in the UAE has increased significantly to an estimated 7,000.
The UAE opened an Abu Dhabi synagogue in February, alongside a Catholic church and a mosque, symbolizing the growing acceptance of different faiths in the country. Despite occasional detours, the UAE remains committed to strengthening its relationship with Israel. The UAE believes that despite its frustrations, the Abraham Accords have been a success and that diplomatic relations with Israel can help address its concerns.
However, opinion polls conducted by the Washington Institute have shown a decline in support for the Abraham Accords in the Gulf. In the UAE, only 27% of respondents viewed the accords as positive for the region, compared to 47% in 2020. Similar declines were observed in Bahrain and Saudi Arabia. In addition, the UAE's plans to purchase advanced F-35 warplanes from the US were suspended after Washington demanded the cancellation of a Huawei contract for 5G technology.
The UAE's experience with the Abraham Accords has been closely followed by Saudi Arabia, which has recognized the limitations of working with Israel. The current tensions are putting a strain on the US's efforts to foster closer relations between Israel and Arab states, particularly Saudi Arabia. Despite the challenges, economic ties between Israel and the UAE continue to grow, offering hope for continued progress in the region.